Tom Lee Defends Bitmine’s ETH Strategy After $6.6B Paper Loss

Bitmine is back in the news following claims of a major unrealized loss on its Ethereum funds. As ETH prices continue low, the company is currently carrying a paper loss nearly $6.6 billion. This triggered criticism on social media. Some traders said Bitmine will later sell its ETH and push prices down.

In response, Tom Lee defended the company strategy. He said people are missing the point of what an Ethereum treasury is supposed to do. He explains that Bitmine is designed to track the price of ETH. While perform better over time. When the market falls, losses are normal. He said this as “a feature, not a bug.”

“Unrealized Loss Is Normal,” Says Lee

Tom Lee said Bitmine works like an index fund. It monitors ETH during market cycles. When crypto prices decline ETH follows that. This causes unrealized losses on the balance sheet. But this doesn’t mean that the strategy failed. He compared it to index ETFs in the stock market. When the S&P 500 falls, ETFs also face losses and investors don’t call that broken. Lee said the same logic should apply to ETH treasury.

According to him, Bitmine is not trying to time the market. It’s trying to hold ETH and grow value over long periods. So short term losses are expected. Additionally, He belief that Ethereum will play a big role in future finance.

Criticism From Traders

The comments came after a trader accused Bitmine of being “exit liquidity” for early ETH holders. The trader argues that Bitmine ETH will later be sold and limit future price gains. He said the large loss shows the strategy is weak. This view spread fast online. Many commenters pointed to the $6.6 billion figure, saying it’s bad timing. While others questioned why Bitmine continued buying while prices were high.

Supporters of Tom Lee pushed back. They said the loss is only on paper. It’s not realized unless the company sells. They also said this is how long term strategies work. You buy during different phases and wait for full cycles to play out.

Market Context Adds Pressure

The wider crypto market is still weak. That makes treasury strategies look worse on paper. Bitmine has almost four million ETH. Which makes it highly prone to price fluctuations. Some investors cited Lee’s previous favorable ETH forecasts. Those targets didn’t happen. This added to the debate. Critics used this to call out and question his confidence yet again. Nonetheless, Lee stood firm. He stated that downturns are always a test of conviction. Lee believes ETH will recover and move higher over time. He added, today’s losses will look small in the future if adoption grows.

What This Means for ETH and Treasuries

This case shows the risk of crypto treasury models. They rise fast in bull markets but they also fall hard in bear markets. Bitmine loss doesn’t mean ETH is finish but it shows how painful cycles can be. For now, the debate continues. Some see Bitmine as proof of long term belief in ETH. While others see it as a warning sign. What happens next will depend on ETH price and how patient investors remain.